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Nortel dumps bandwidth exchange suit

Company says Arbinet will settle in copyright infringement dispute.

Nortel Networks said Tuesday it is dropping a copyright infringement lawsuit against Arbinet's Thexchange, which buys and sells bandwidth and telephone voice minutes. Arbinet agreed to pay Nortel an undisclosed amount as part of the settlement, according to Nortel.

In its lawsuit filed in July, Nortel accused Arbinet of violating copyrights and exceeding the usage level permitted under Nortel's software licensing agreement. Nortel also accused the company of failing to meet contractual obligations for the purchase of its switching equipment. The case had been pending in a U.S. district court in Alexandria, Va. When the case was originally filed, Nortel had asked the court for an injunction to force Arbinet to stop using its software. It also had asked that Arbinet pay damages, which had been estimated at roughly $6 million.